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On Smiles, Winks, and Handshakes as Coordination Devices

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  • Paola Manzini

    (Queen Mary, University of London)

  • Abdolkarim Sadrieh

    ()
    (Tilburg University)

  • Nicolaas J. Vriend

    ()
    (Queen Mary, University of London)

Abstract

In an experimental study we examine a variant of the 'minimum effort game' , a coordination game with Pareto ranked equilibria, and risk considerations pointing to the least efficient equilibrium. We focus on the question whether simple cues such as smiles, winks and handshakes could be recognized and employed by the players as a tell-tale sign of each other's trustworthiness , thus enabling them to coordinate on the more risky but more rewarding Pareto efficient equilibrium. Our experimental results show that such cues may indeed play a role as coordination devices as their information value is significant and substantial.

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Bibliographic Info

Paper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 456.

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Date of creation: Mar 2002
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Handle: RePEc:qmw:qmwecw:wp456

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Keywords: Coordination games; Pareto efficiency; Trust; Cues; Signals;

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References

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Cited by:
  1. Francesco Feri & Bernd Irlenbusch & Matthias Sutter, 2010. "Efficiency Gains from Team-Based Coordination—Large-Scale Experimental Evidence," American Economic Review, American Economic Association, vol. 100(4), pages 1892-1912, September.
  2. John Bone & Michalis Drouvelis & Indrajit Ray, 2012. "Following Recommendations to Avoid Coordination-Failure in 2 x 2 Games," Discussion Papers 12-04, Department of Economics, University of Birmingham.
  3. Centorrino, Samuele & Djemai, Elodie & Hopfensitz, Astrid & Milinski, Manfred & Seabright, Paul, 2011. "Smiling is a Costly Signal of Cooperation Opportunities: Experimental Evidence from a Trust Game," CEPR Discussion Papers 8374, C.E.P.R. Discussion Papers.
  4. Peter H. Kriss & Andreas Blume & Roberto A. Weber, 2011. "Coordination, efficiency and pre-play communication with forgone costly messages," ECON - Working Papers 034, Department of Economics - University of Zurich.
  5. Quazi Shahriar & Subhasish Dugar, 2009. "Focal Points and Economic Efficiency: Role of Relative Label Salience," Working Papers 0033, San Diego State University, Department of Economics.
  6. Johne Bone & Michalis Drouvelis & Indrajit Ray, 2013. "Coordination in 2 x 2 Games by Following Recommendations from Correlated Equilibria," Discussion Papers 12-04r, Department of Economics, University of Birmingham.

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